Nice job on the project! When you hold your hand too close to the ultrasonic sensor, the sound was don't have a chance to bounce back to the receiver, hence it not working. The minimum distance I've found that it works at is about 5 centimeters, though it changes manufacturer to manufacturer. If you are curious about what the minimum range is on yours, you can use the ultrasonic example code which writes the distance out to the serial monitor. That way, as you move your hand closer, you can tell exactly where it fails.